MBMGL A W O F F I C E

Labour Laws with regards to termination of Employment

Who are protected under �ai Labour Laws

Termination or dismissal of the employee and the severance claim

Termination of employment is a serious dispute between the employee and employer, which may result in a lawsuit in the Labour Court. �e major disputes are:

• Issuance of employment termination• Unfair dismissal • Compensation claims

�erefore, we will specify the basic rights of both the employer and employee who are involved in a termination of employment according to the Labour Protection Act 1998 and �e Act Establishing the Labor Court and Labor Court Procedure 1979.

MBMG Law Brief UpdateJuly 2010

�e di�erence between “Termination” and “Dismissal” “Termination” means end of employment between the employer and the employee by- Resignation - Mutual Agreement- Dismissal

“Dismissal” means any action by which the employer does not allow the employee to continue to work and does not pay the salary to the employee whether due to the termination of the employment agreement or for any other reason.

Generally, when employees are dismissed, they are entitled to claim for severance payment from their employers and 30 days salary in lieu of 30 days notice except when the dismissal has been done for any of the following reasons:

1. Crime committed against employer2. Intentional act causing the employer to suffer damage(s)3. Negligent act causing the employer to suffer damage(s)4. Violation of work rules after a written warning has been issued5. Absence for 3 (three) consecutive working days without a reasonable cause6. Having been sentenced to imprisonment

All individuals (whether Thai or foreign employees) working for remuneration in Thai or international companies doing business in �ailand are protected by this Law.

�is publication has been prepared for general information only. MBMG Law O�ce Co., Ltd. make no warranty, representation or undertaking whether expressed or implied, nor does it assume any legal liability, whether direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information. All right is reserved.

Disclaimer:

MBMG Law O�ce Co., Ltd.In a foreign country where the language and laws are unfamiliar, unpredictable situations and problems can arise, especially when dealing with cross-border jurisdictions. As well as having its own in-house law �rm which can assist in the resolution of legal, contractual or employment disputes, MBMG has developed professional associations and relationships with a number of specialist legal practices in Bangkok, throughout Asia and globally. �rough utilization of these partnerships, we can provide a comprehensive range of personal, corporate, local and international legal assistance. �ese include, but are not limited to, the following:

• Draft and Review Legal Arrangements• Company Registrations• BOI & FBA Applications• Will and Trusts• Contract Law• �ai Visa and Work Permit Applications• Structure of business• Joint Venture and other ownership structures• Merger & Acquisitions• Government concessions and licensing• Property ownership and mortgages • Litigation

Mr. �ammarat SangchanAttorney - at - LawTel: +66(0)2 665 2534-9 ext. 111E-mail: thammarat@mbmg-internaitonal.comMs. Suchada FaharoonAttorney - at - LawTel: +66(0)2 665 2534-9 ext. 112E-mail: amp@mbmg-international.com

Contact:

MBMG Law Brief UpdateJuly 2010

MBMGL A W O F F I C E

Rate of severance bene�t is varied and dependent on the duration of employment:

Claim for unfair dismissal

Duration of employment

More than 120 days but not exceeding 1 year

More than 1 year but less than 3 years

More than 3 years but less than 6 years

More than 6 years but less than 10 years

More than 10 years

Rate of Severance Payment

30 days

90 days

180 days

240 days

300 days

Note: Employees have no right to claim for severance payment when the termina-tion is based on mutual agreement and/or a resignation letter with a full wages paid by the employers.

Under �e Act Establishing the Labor Court and Labor Court Procedure 1979, event that employees are unfairly dismissed by the employer they are entitled to claim for compensation in addition to severance bene�t.

“Unfair Dismissal” means any action which may cause di�culties for the employee(s) to continue working or will not allow them to ful�ll their new jobs or the employed(s) were discharged by the employers for unfair reasons such as gender, colour, age, disability, religion, culture, language, marital status etc.

Unfair Dismissal cases can be �led to a Labour Court and the compensation will be considered from various conditions such as nature of work, age of employees, employment duration, and wages etc.

�erefore, employers must ensure to settle termination compensation with the employee(s) and always request for employee to sign a letter of receipt and agree to release the employers from further claims.